Learn more about the housing market in Oregon

Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.  

Oregon Housing Market Overview 

Located in the Pacific Northwest, the Beaver State is known for its beautiful outdoors. Oregon is one of the most geographically diverse U.S. states, home to volcanoes, mountains, lakes, deserts, and rocky Pacific coastlines, known especially for famous attractions like Mount Hood, Crater Lake, and Cannon Beach. Its natural features and outdoor adventuring are one of Oregon’s primary attractive forces for both visitors and prospective homeowners. 

Residents of the state boast strong job prospects in a variety of successful industries. Although Oregon’s economy was traditionally based on resource extraction, forestry, fishing, and farming, today the state’s economy focuses more on trade, recreation, tourism, biotechnology, and manufacturing. Trade with Asia is possible due to the state’s location on the West Coast. Like its natural attractions, Oregon’s economy is a huge pull for prospective home buyers. In fact, Oregon made an overwhelmingly successful recovery from pandemic lows, regaining nine out of ten jobs that were lost during the pandemic recession by April of 2022. 

The newfound energy of Oregon’s economy and job market can also be seen in the state’s housing market. Oregon is currently seeing intense bidding wars in addition to rising prices and low inventory: all the ingredients for a competitive seller’s market. Particularly competitive areas include Wood Village, Clackamas, and River Road. 

However, like the rest of the U.S., an increase in demand and prices has led to an increasingly serious affordability crisis in many parts of the state. In fact, a lack of affordable housing options has caused lawmakers in Oregon to consider upending decades-old laws that protect wildlife reserves and prevent suburban sprawl. Homeowners, new buyers, and analysts in Oregon will continue to monitor the housing market to see if other solutions are possible.

Oregon Housing Market Trends 

To understand the Oregon real estate market, it’s important to keep up with trends. Let’s look at some key ones in Oregon: 

Note: These statistics are based on Redfin’s monthly housing data from April 2024. 

Median Home Price 

The median sales price for homes in Oregon is $523,300, up 2.3% since last year according to Redfin’s monthly housing data for May 2024. Although Oregon’s prices aren’t as high as homes in many California markets, this higher-than-average median falls in track with the other West Coast states. Portland’s median sales price is similar, currently at $540K. 

Number of Homes Sold in April 2024 

4,539 homes sold in Oregon in April of 2024, up 2.3% since April of 2023. This metric gives us a good picture of the current sales volume in Oregon. However, keep in mind that this number might be inflated compared to other months since nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%. 

Median Days on Market (DOM) 

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage. 

The current median DOM in Oregon is 22 days. This means Oregon homes sell in about three weeks on average after being listed. This relatively low DOM indicates a competitive seller’s market in Oregon currently. 

New Supply Statistics 

Housing supply in Oregon is increasing, which could lead to more housing opportunities and ease the financial burden of renters and homeowners in the state. On average, there were about 5.16 new residential construction permits per 1,000 people in Oregon in 2021. This rate of new construction is higher than in most states (although not quite as high as some high-demand Western states like Arizona and Colorado) and will contribute to increase housing inventory throughout the rest of 2024, suggesting more availability of homes and an ease in prices could be coming to break up the seller’s market. 

Property Tax Rate 

The average property tax rate in Oregon is 0.93%, according to Rocket Mortgage. This places Oregon’s average property tax rate as the 28th lowest in the U.S., about average compared to other states. However, keep in mind that property taxes vary widely depending on the specific county of Oregon and the value of the home. 

Foreclosure Rate in Q1 of 2024 

In the first quarter of 2024, 1 in every 3,681 homes experienced a foreclosure filing (according to recent data from ATTOM). Based on this data, Oregon’s foreclosure rate is below average compared to the rest of the nation. 

Hottest Local Markets in Oregon 

Oregon features many vibrant, diverse housing markets. Below we review a few of the top markets for homeownership and real estate investing in 2024.

1. Portland

Portland is famous for everything from donut tours to the largest bookstore in the world. It’s also a great place for real estate investing. At the end of last year, experts predicted that Portland properties would continue to appreciate in the spring of 2024 and then experience market stabilization/correction by the beginning of 2025. A different source predicted home prices would drop in Portland, along with other expensive cities like Austin, St. Louis, and Dallas. So far, it appears that prices have continued their rise, with the current median sales price in Portland at $540,000, although it’s of course too early to tell whether market stabilization is on the way.

Portland is also an ideal location for short-term rental properties, as it receives plenty of tourism throughout the year and is also close to booming resort towns near Mt. Hood.

2. Salem

Salem, the state capital, is one of the fastest growing real estate markets in Oregon. The city’s central location, within driving distance of both the coast and mountain see resorts, makes it an ideal location for long-term rental property investing. Properties spending just 33 days on the market, and rent prices are trending upward as well.

3. Aurora

This town, located in Marion County in Northwest Oregon, is another great option for real estate investing. The current median home sale price in Aurora is 721K, up almost 30% since this time last year. Aurora has seen substantial population growth over the past few decades and is expected to continue to attract new buyers interested in high value homes located in a more rural setting. 

Economic Factors Impacting the Oregon Housing Market 

A holistic view of Oregon’s housing market requires a basic understanding of the main economic drivers affecting the market. Let’s look at a few critical ones below: 

Mortgage Rates 

High mortgage rates are a continuing challenge for would-be homeowners in the U.S. Oregon’s average rates for 30-year mortgages in June of 2024 are close to the national average at 7.06%. Higher interest rates deter borrowing and discourage those who already own homes from putting their homes on the market. Many homeowners report feeling “locked in” to their current homes, as it is unlikely they will secure a mortgage rate as low as their current one on their next property. Prospective buyers in Oregon should monitor mortgage rates in the coming months for a better understanding of how they impact the housing market. 

Inflation and Cost of Living 

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in Oregon. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income. 

Population Changes and Demographics 

Population trends, employment, and migration each affect the housing market. In Oregon, the unemployment rate is currently 4.20%, slightly higher than the national unemployment rate. Additionally, the state approximately breaks even when it comes to in-migration and out-migration due to push and pull factors like prices and opportunity. Homeowners and investors should continue to monitor Oregon’s population changes and demographics for future insights about how these factors affect the housing market. 

Oregon Housing Market Forecast 

As mentioned above, some experts predict that Oregon’s housing market will experience stabilization or correction moving into 2025. Although we’ll have to wait a few months to see if this is indeed the case, Oregon’s current trajectory is positive. Demand is likely to remain high, as will prices, until a rate cut occurs. The second half of 2024 will likely bring continued high market activity and bidding wars until new construction can be completed to increase inventory and ease prices for buyers. 

Likelihood of Oregon Housing Market Crash  

Due to high demand for properties in the state, a housing market crash in Oregon is unlikely. The 2008 housing market crash was preceded by a slowing market and decrease in demand. These conditions are not seen in Oregon currently, where market activity is high and appreciation is steady. 

Forecast for The U.S. Housing Market 

Now that we’ve looked at Oregon’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years? 

The United States’s current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9. 

We’re currently in a seller’s market with buyers looking at continued rising house prices. The same trend can be seen with renters. Housing continues to appreciate, in general.  

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get. 

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth. 

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.  

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.  

Oregon Rental Market 

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.  

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.  

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.  

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year. 

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

This short summary leads directly into Oregon’s current rental market, with key trends below from Zillow: 

Oregon Rental Market Key Trends 

• Median rent: $1,752 

• Month-over-month rent change: +$27 

• Year-over-year rent change: -$43 

• Available rentals: 6,252 

Conclusion 

The Oregon housing market in 2024 is marked by a blend of stability and growth, making it crucial for potential buyers and sellers to stay informed about market trends. Whether you’re looking to purchase a home soon or sell your property in Oregon, the macro- and micro- economic trends outlined above will affect your decision-making. Market dynamics like changes in home prices, inventory levels, and interest rates will continue to be critical for stakeholders in Oregon real estate.